Job Report Brings No Cheer To Main Street

Jobs: Wall Street is cheering while Main Street stays mired in a listless recovery. Maybe this makes sense to Barack Obama and the Fed, but try explaining it to the unemployed.

Friday was another one of those alternate-universe days on Wall Street. The Bureau of Labor Statistics came out with April job numbers that are only so-so, but the stock market greeted the news with another big rally.

Both the Dow 30 and the S&P 500 set records, with the Dow hitting 15,000 intraday for the first time.

All this over a BLS report showing payrolls rising 166,000 in April, barely enough to absorb the natural increase in the labor force. True, unemployment edged down from 7.6% to 7.5%, and the March and February job totals were revised upward (by 114,000 for the two months combined). But none of this resembles the robust growth normally seen at this point in a recovery.

The share of working-age Americans with jobs — 58.6% — has barely budged since the bottom of the recession, and we're still some 2 million jobs short of pre-recession levels. This is unique in post-World War II history. At this point in every other recovery, the job losses had long since been erased. On average, payrolls were 7.6 million above the pre-recession peak.

This is a serious problem at the grass roots, among job seekers and businesses that need a fully employed, well-paid middle class to fuel demand for their products and services. Main Street, in short.

Wall Street has a different take — and we say that simply to state a fact, not to make a moral distinction. Its fortunes rise or fall with the demand for financial assets, which may have a connection to the health of the broader economy.

Right now the stock market is riding a valuation wave generated by corporate earnings and monetary easing by the Federal Reserve. Profits can rise without much job creation — in fact, cutting jobs is one way to boost the bottom line when sales growth is sluggish.

And the Fed is, if anything, job-contrarian.

It has announced it will stop easing once unemployment falls to 6.5%. When that happens, stocks will start losing the crutch of ultralow interest rates that are putting competing investments, such as bonds and CDs, at such a disadvantage.

From the stock market's point of view, Friday's report was just the right level of mediocrity. It showed the economy wasn't tanking, so companies can still make good money. And it showed the job market wasn't likely to cross the Fed's red line soon.

We certainly can't complain when the stock market makes investors richer. But it's hard not to see the irony when Wall Street showers its blessings on an administration that is hardly a friend to free-market capitalism.

When the Dow is up, it makes the party in power look good. It also draws attention away from the widespread economic pain that you don't see on CNBC.

The Obama White House can talk all it wants about its commitment to a thriving middle class, but if the media ignore the real plight of the middle class and focus on the Dow, well, that works for it, too.

See Also

Politics: The White House has denounced an anti-abortion group's videos of Planned Parenthood's activities as "fraudulent" and circled its wagons to defend the indefensible. What kind of White House is this?For an institution that might argue that it doesn't have a dog in this fight, the White ...

Iran Deal: After initially refusing, the United Nations' International Atomic Energy Agency will brief senators Wednesday. Are its nuclear monitoring practices kept secret because they're inadequate?Yukiya Amano, the director general of the IAEA, until Friday was refusing to brief senators on ...

Corruption: The third installment of released emails fell hard Friday on the Hillary Clinton campaign. If her candidacy lasts until the end of the summer, there's much more wrong with this country than we thought.Friday had to be an extraordinarily trying day for the Democratic front-runner. On the ...

Regulation: As businesses struggle to stay open and lay off workers, the Environmental Protection Agency is preparing one of the biggest hiring binges in America outside of Google. Good news? Hardly.Barack Obama's EPA has announced it will try to hire 800 new regulators over the next several ...

Taxes Vs. Prosperity: The Real Wedge Issue Ronald Reagan died 11 years ago, and his presidency ended a quarter century ago. But my, how his tax-cutting ideas live on. The living legacy of Reaganomics, or supply-side economics, is that tax rates keep falling all over the world. Imitation really is ...

About Investor's Business Daily

Investor’s Business Daily provides exclusive stock lists, investing data, stock market research, education and the latest financial and business news to help investors make more money in the stock market. All of IBD’s products and features are based on the CAN SLIM® Investing System developed by IBD’s Founder William J. O’Neil, who identified the seven common characteristics that winning stocks display before making huge price gains. Each letter of CAN SLIM represents one of those traits.

Select market data is provided by Interactive Data Corp. Real Time Services. Price and Volume data is delayed 20 minutes unless otherwise noted, is believed accurate but is not warranted or guaranteed by Interactive Data Corp. Real Time Services and is subject to Interactive Data Corp. Real Time Services terms. All times are Eastern United States. *Reflects real-time index prices.